The Indian paint industry’s operating margins are forecasted to remain stable at 15-16% for FY2024, even as crude oil prices and raw material costs witness fluctuations. Paint manufacturers have taken measures to maintain profitability by optimizing production processes and enhancing operational efficiencies.
Crude Oil and Titanium Dioxide Price Trends
Since crude oil is a key input for paint manufacturing, changes in its price directly impact production costs. However, global crude oil prices have recently stabilized, providing some relief to manufacturers. Additionally, the prices of titanium dioxide (TiO2), a critical raw material, have seen a downward trend.
Offsetting Cost Advantages with Marketing and Branding
While lower input costs offer cost advantages, paint companies are ramping up advertising and marketing expenditures to retain market share amid increased competition from Grasim and JSW Paints. Leading players like Asian Paints have boosted advertising spend to maintain brand visibility.
Despite these cost pressures, analysts expect paint companies to sustain stable margins, thanks to pricing power, premium product launches, and operational efficiencies.